France And Germany: Test Case for Leadership?
By Staff News & Analysis - May 29, 2013

France and Germany: A Tale of Two Countries Drifting Apart … A political, economic and demographic divide has opened up between France and Germany. And, if that were not trouble enough, a new Pew Research Center survey suggests that these two countries, which have for decades been the driving force behind European integration, increasingly see the world through different lenses. – Pew/BBC

Dominant Social Theme: The Franco-German divide is a big problem but it will be overcome.

Free-Market Analysis: There are various ways to interpret this curious article, but probably three are the most significant. First of all, we believe it is an inaccurate assessment of the situation in Germany. We believe more Germans are dissatisfied with the EU and the euro than the Pew survey contends.

Second, the article reveals the entrenched worry of the Eurocrats who have supervised this conglomeration of Europe. As it falls apart, their nerves are stretched and they obsessively monitor the reactions of the long-suffering masses that have to put up with the debasing of their currency and the economic distortions that have thrown tens of millions out of work.

Finally, the article reveals toward the end a dominant social theme that may explain what is behind the obsessiveness of this pulse-taking and the solution that is to be proposed. Here's more from the article.

The Franco-German alliance was based on rough equality between these two continental powers. In the 1980s, West Germany's economy and population were slightly larger than France's, but not overwhelmingly so, and French economic growth actually exceeded its neighbour's. Three decades later, this rough balance between Germany and France no longer exists. Germany's population is now a quarter larger than that of France, the German economy is 38% bigger. And while the German economy grew at an admittedly weak 0.9% in 2012, the French economy did not grow at all.

The demographic and economic decoupling of Germany and France is now complicated by a widening gap in French and German public opinion – and a convergence of French attitudes with those in southern Europe. Today the French and the Germans differ so greatly over the challenges facing their economies that they look as if they live on different continents, not within a single European market. Eight out of 10 French people say unemployment is a very big problem compared with less than three out of 10 Germans.

More than two-thirds of the French think inflation is a major issue, less than a third of Germans are similarly worried about rising prices. And 71% of the French are very troubled about public debt. Only 37% of the Germans share such concern. More important for the future of the European Union, in 2009, 43% of the French were of the view that European economic integration had strengthened the French economy.

At the same time, 50% of Germans thought integration had benefited Germany, a seven-percentage-point difference. Today, the figures for France and Germany are 22% and 54% respectively – a difference of a full 32 points. The French and Germans have also parted ways in their views of the European Union as an institution. In 2007, before the euro crisis, 62% of the French and 68% of the Germans had a favourable opinion of it. In 2013, just 41% of the French still hold the EU in high regard, while 60% of the Germans do …

Few observers believe that political union, or even more extensive economic integration, is possible in the absence of strong joint leadership by Paris and Berlin. This new evidence of a dramatic divergence of public opinion across the Rhine on the problems now facing Europe and the merit of the European Union itself raises new questions about prospects for the European Project.

We do believe that the powers-that-be are frightened the devolution of European prosperity has been taken too far. The numbers of youth unemployed in Greece and Spain alone are staggering, supposedly some 40 percent and 60 percent, respectively.

Numbers presumably cannot provide us fully with the horror of ruined families, blighted lives and cultures in crisis. Those running this Brussels-based empire are surely aware, uneasily, that their time is running out. Something will have to be done.

To complicate matters, the Pew survey shows us clearly that what has happened in the rest of Southern Europe is beginning to happen in France, one of the main engines of this misbegotten empire. The French are waking up and if anti-EU sentiment rises in Spain, difficulties for the union will surely increase. The entire project is apparently a huge balancing act.

On the one hand (as we have reported in numerous articles), the Eurocrats have signaled their determination to create and pursue an economic crisis to create a deeper political union. On the other, the concern has apparently deepened that such a crisis is going to undermine the project as a whole.

Enter the "solution" that is contemplated, one repeated again in this article: "Few observers believe that political union, or even more extensive economic integration, is possible in the absence of strong joint leadership by Paris and Berlin."

The idea, it seems, is to create a climate for new and "strong" leadership to emerge. We would argue that the Internet Reformation itself militates against the creation of such leadership. At least, surveying the current ranks of Eurocrats, we don't see it.

After Thoughts

Will a new leader emerge? Is he or she now being cultivated in the bowels of Brussels? What will this new leadership look and sound like? And most importantly, is it already too late?

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